Question

Question 5

What is superannuation and what kinds of tax concessions exist to encourage superannuation investment?

Question 6

What principle was established in IRC v Duke of Westminster [1936] AC 1? How relevant is that principle today in Australia?

Answer 1

5.Superannuation is a type of investment fund that is useful to get a regular income at defined periods after the person retires and to encourage this government of Australia has provided few tax concessions such as tax free withdrawal if it is made after retirement and during contribution into this fund the employee will get a tax deduction on such income that is contributed by the employer on behalf of employee till a specified limit.

6.The principle in the case of IRC vs Duke of Westminster(1936) AC 1 was that a person can manage his financial affairs in such a way that he has to pay lesser tax, this is later referred as tax avoidance without any legal non compliance. if the person does so, he cannot be punished under the taxation laws. but now it became irrelevant as the courts decided to introduce Ramsay Principle to tax such avoidance actions of tax payers.